Amazon Buys Whole Foods for $13.7 Billion

Courtesy Whole Foods.

Amazon’s $13.7 billion acquisition of organic supermarket giant Whole Foods, announced before the bell today, is not only the largest deal in the grocery business but further confirmation that the online merchant is serious about entering the brick-and-mortar world.

It is a shot across the bow for wine producers and other food giants, such as Costco and Kroger, analysts say.

Suppliers, including wineries, will now be dealing with an even larger grocery store chain, meaning potentially pressured profit margins. Whole Foods sells about 3.5 million cases of wine annually.

Grocers like Kroger will probably face an escalating price war while Costco faces defections from its members, many of whom are Amazon Prime members.

Amazon shares were up 3.2 percent at $995.55, while Whole Foods jumped more than 26 percent to $41.87 early Friday.

Published on June 16, 2017
Topics: Latest News